News Release

WYOMISSING, Pa.--(BUSINESS WIRE)--Sept. 21, 2006--Carpenter
Technology Corporation (NYSE:CRS) announced today its strategic
initiatives to drive long-term growth. These initiatives will provide
a cornerstone for Carpenter to further enhance Total Shareholder
Return ("TSR"). They include:

-- Accelerated growth in certain core markets, in particular
aerospace, medical, and energy, resulting in a greater mix of
higher value materials and products
-- Profitable growth through complementary acquisitions that can
be quickly integrated
-- Establishment of a share repurchase program
-- More competitive dividend

These actions will be consistent with Carpenter's financial
discipline and its stated financial objectives.

The Company has previously committed to, at a minimum:
-- Sales growth of 5%
-- Operating margin of 12%
-- Return on Net Assets of 10%
-- Debt-to-Capital of 35% or less
-- Economic Profit

"Our success over the last few years has been achieved by focusing
on operational excellence and by investing capital with greater
financial discipline," said Robert J. Torcolini, chairman, president
and chief executive officer. "Through a comprehensive review process
led by Carpenter's Vice Chairman Mike Fitzpatrick, we have identified
significant growth opportunities close to our core business. Our
strong financial position will allow us to grow profitably,
organically and through acquisitions while at the same time providing
our shareholders with increased cash returns through dividends and
share repurchases."

Organic Growth

At the heart of the Company's strategy is its plan to build on its
core business in four attractive and fast growing end-use markets:
aerospace, medical, energy, and high value segments of automotive.
These markets require high performance products made to exacting
specifications that cannot be easily substituted. Typically, Carpenter
is one of a few companies worldwide that is able to supply these
technically demanding materials and products. Today, sales of
Carpenter products into these four markets represent approximately 55
percent, or $875 million, of the Company's fiscal 2006 revenue. As a
result of the strategic review process, Carpenter believes that
approximately $500 million of organic growth opportunities in its
highest margin businesses exist in these markets over the next four
years.

In the aerospace market, commercial aircraft build rates are
forecast to increase, on average, 10% annually through 2011. Airbus
and Boeing have five years of production on their order books. These
strong order patterns are coming primarily from Middle Eastern and
Asian airlines and regional and low cost airlines in the United States
and Europe. The major United States and European airlines are also
expected to begin replacing a greater percentage of their fleets
during this period, which would further strengthen demand.

Many of the new, lighter, more fuel efficient aircraft will use
significantly more titanium for their airframes than current models
and will require more of the high temperature superalloys that
Carpenter specializes in for the new generation of high performance
engines.

The medical products market is also set for strong growth, which
will generate increasing demand for Carpenter's titanium, CCM (cobalt
/ chrome / molybdenum), and specialty stainless products. These high
performance materials are used in medical implants, surgical
instruments, and other critical medical applications.

In the United States and Europe, the population entering its
sixties carries an expectation of additional years of active
lifestyles and, in many cases, a preference for joint replacement
rather than reduced mobility. A better standard of living in Asia is
also generating demand for the latest health care advances. Carpenter
continues to develop new alloys and products to meet the growing
demand of these technology advances.

Growth rates in the aerospace and medical markets are expected to
be greater than 10%, on average, over the next four years. The Company
believes this robust activity will generate increased demand for its
highest margin products, including nickel-based alloys and titanium,
in excess of those growth rates.

To capitalize on these opportunities, Carpenter plans to invest
approximately $200 million in capital expenditures over the next four
years, which will include additional premium melt capacity.
Additionally, the company will increase its focus on key end-use
markets and place a greater emphasis on research and development.

Recently, Carpenter modernized two previously idled
electro-slag-remelting ("ESR") furnaces to increase the production of
premium melt products. Carpenter is also currently installing two
additional vacuum arc remelting ("VAR") furnaces that are expected to
be operational by December 2006 and will augment its 17 existing
furnaces.

The ESR and VAR furnaces are used in the production of higher
margin products for critical end product applications such as rotating
aircraft engine parts, high performance automotive and truck engine
parts, and medical devices. These investments are in addition to the
nearly $500 million of prior capital spending made between 1997 and
2002.

Growth Through Acquisitions

In addition to organic growth, Carpenter will seek to acquire
companies that sell into high growth markets including, but not
limited to, the aerospace, medical, energy and automotive and, which
provide a strong fit with the Company's expertise in high performance
materials. In addition, the Company will seek opportunities to expand
its geographic base.

Carpenter's priority will be acquisitions close to its core
businesses and markets that can make an immediate and meaningful
contribution to Carpenter's operating income.

-- Generate earnings that will exceed Carpenter's cost of capital
-- Generate earnings that are accretive to earnings per share in
year one

Transactions will be structured in a manner that maintains an
investment grade debt rating.

Share Repurchase Program

As part of the company's strategy to enhance TSR, the Board of
Directors has authorized a share repurchase program of up to $250
million of Carpenter's outstanding common stock. The share repurchase
program reaffirms management's view that Carpenter's stock is an
attractive investment based on its strategic initiatives and expected
growth in earnings and cash flow.

The repurchases will occur at such times and at such prices as the
management of the Company determines. The share repurchase program
will be funded with the Company's excess cash after giving
consideration to capital investments, acquisitions and future cash
flows. It is expected that the authorization will be utilized over the
next 12-18 months, subject to market conditions.

Dividend Increase

Another element of Carpenter's TSR strategy is its dividend rate,
which was reflected in the 50% increase in the company's quarterly
cash dividend that was announced on August 24, 2006. Carpenter's new
annualized dividend is $0.90 per share of common stock.

Torcolini added, "Over the last several years, we have transformed
Carpenter into a company producing and distributing higher value
products. At the same time, we have lowered our cost structure to
further enhance our overall competitiveness throughout the business
cycle. Carpenter expects to continue generating returns in excess of
its cost of capital, and combined with strong cash flows, is in a
position to further reward shareholders with this increased dividend."

The company intends to maintain a dividend that delivers a return
to shareholders competitive with that of other materials stocks and
relevant indices. Future dividend increases will be made at a measured
pace, consistent with business conditions.

There are a number of factors that the Company will consider in
determining the size of future dividend increases and share
repurchases. It is critical that the Company maintains its strong and
flexible financial position in order to ensure that regardless of the
stage of the business cycle, it will be able to:

-- Continue the research, development, and introduction of new
products
-- Continue to identify and make acquisitions that meet its
financial criteria
-- Make key investments, capital expenditures and pursue other
activities to achieve its long term profitability.

Torcolini concluded, "Carpenter recently achieved several
milestones, including another record fiscal year and a fourth quarter
that surpassed last year's fourth quarter earnings by more than 40
percent. We are excited about the growth prospects in our core markets
and we are confident in our ability to capture opportunities which
will enable us to continue to profitably grow our Company and to
continue to reward our shareholders."

Carpenter produces and distributes specialty alloys, including
stainless steels, titanium alloys, and superalloys, and various
engineered products. Information about Carpenter can be found on the
Internet at www.cartech.com.

Except for historical information, all other information in this
news release consists of forward-looking statements within the meaning
of the Private Securities Litigation Act of 1995. These
forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ from those projected, anticipated
or implied. The most significant of these uncertainties are described
in Carpenter's filings with the Securities and Exchange Commission
including its annual report on Form 10-K for the year ended June 30,
2006, and the exhibits attached to those filings. They include but are
not limited to: 1) the cyclical nature of the specialty materials
business and certain end-use markets, including aerospace, industrial,
automotive, consumer, medical, and energy including power generation,
or other influences on Carpenter's business such as new competitors,
the consolidation of customers, and suppliers or the transfer of
manufacturing capacity from the United States to foreign countries; 2)
the ability of Carpenter to achieve cost savings, productivity
improvements or process changes; 3) the ability to recoup increases in
the cost of energy and raw materials or other factors; 4) domestic and
foreign excess manufacturing capacity for certain metals; 5)
fluctuations in currency exchange rates; 6) the degree of success of
government trade actions; 7) the valuation of the assets and
liabilities in Carpenter's pension trusts and the accounting for
pension plans; 8) possible labor disputes or work stoppages; 9) the
potential that our customers may substitute alternate materials or
adopt different manufacturing practices that replace or limit the
suitability of our products; and 10) the ability to successfully
acquire and integrate acquisitions. Any of these factors could have an
adverse and/or fluctuating effect on Carpenter's results of
operations. The forward-looking statements in this document are
intended to be subject to the safe harbor protection provided by
Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. Carpenter
undertakes no obligation to update or revise any forward-looking
statements.